Date:
20090318
Docket:
A-352-08
Citation:
2009 FCA 92
CORAM: EVANS
J.A.
RYER
J.A.
TRUDEL
J.A.
BETWEEN:
ROCHELLE L.
MOSS
Appellant
and
HER MAJESTY
THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered
from the Bench at Winnipeg, Manitoba, on March 18, 2009)
RYER J.A.
[1]
This is an
appeal from a decision of Campbell J. (the “trial judge”) of the Federal Court
(2008 FC 768) dated June 19, 2008, dismissing an action for damages claimed by
Rochelle L. Moss (the “appellant”) against Her Majesty the Queen (the
“respondent”). The appellant’s claim alleges that conduct of the Minister of
National Revenue (the “Minister”) in relation to the collection of income taxes
payable by her, pursuant to the Income Tax Act, R.S.C. 1985, c. 1 (5th
Supp.) (the “ITA”), prevented her from organizing her affairs in a tax
advantageous manner and as a result, she incurred an income tax liability that
she would not have otherwise incurred.
Background
[2]
In January
of 1997, the appellant was assessed a tax liability approximating $302,000. On
February 5, 1997, the Minister obtained an order (the “Jeopardy Order”),
pursuant to subsection 225.2(2) of the ITA, authorizing the Minister to take
any of the collection actions described in paragraphs 225.1(1)(a) to (g) of the
ITA with respect to the income tax that was assessed against the appellant
prior to the completion of the appeals process. The validity of the Jeopardy
Order has been unsuccessfully challenged by the appellant.
[3]
Based upon
the Jeopardy Order, the Minister issued written requirements pursuant to
subsection 224(1) of the ITA (the “Requirements”) to three insurance companies,
requiring them to pay to the Minister monies owing by them to the appellant. The
Minister also instructed the sheriff to seize any property of the appellant
held by those companies pursuant to writs of fieri facias.
[4]
The
insurance companies had contractual arrangements (“insurance policies”) with
the appellant under which funds were payable to her. Nonetheless, they declined
to make any payments to the Minister pursuant to the Requirements and took the
position that the insurance policies were exempt from seizure. After soliciting
opinions from the Minister, the insurance companies determined that they would
not permit the appellant to withdraw any amounts owing to her under the
insurance policies until the exemption from seizure issue was settled.
[5]
In her
statement of claim, the appellant alleges that the Minister caused the
insurance companies to “freeze” her insurance policies, which prevented her
from restructuring them in such a way that all of the income generated by them
would have been immune from income tax. Accordingly, she claims that the
actions of the Minister caused damage to her in that the income from her
insurance policies was taxable when it need not have been.
[6]
The
appellant unsuccessfully contested the assessments of tax on the income
generated by the insurance policies in the Tax Court of Canada (Moss v.
Canada, 2005 TCC 139). There, the appellant argued that to the extent that
the assessments related to income earned on her insurance policies that was
“forced upon the appellant by virtue of CCRA’s improper actions” (see paragraph
5 of the reasons in that decision), those assessments should be reversed.
[7]
The Tax
Court Judge rejected that argument, stating that any allegations of improper
conduct on the part of the Minister in collection matters were required to be
made in the Federal Court. In upholding that decision, Sharlow J.A., in Moss
v. Canada, 2006 FCA 150, stated at paragraph 5:
If unlawful
or improper collection actions occur, and are proved, it may be possible to
obtain a remedy by commencing appropriate proceedings in the Federal Court …
[8]
Thus, the
appellant seeks a remedy in the statement of claim that she filed in the
Federal Court.
The Decision of the
Federal Court
[9]
The
trial judge dismissed the appellant’s claim on the basis that she failed to
prove that her income tax liability was caused by any action of the Minister.
The main findings of the trial judge are succinctly summarized at paragraph 7
of his reasons, where he stated:
… I find
that: it is Ms. Moss’ conduct that caused the jeopardy order to be issued; as
stated, no wrong was committed by the Minister in applying for the order; and
no wrong was committed by the Minister in attaching the insurance policies.
[10]
The trial
judge also found that the Minister’s attempt to seize the insurance policies
was unsuccessful and the Minister never obtained control over those policies.
He further concluded that the insurance policies had been “frozen” by actions
taken by the insurance companies, and not by any action on the part of the
Minister.
Discussion
[11]
The
findings upon which the trial judge based his decision to dismiss the
appellant’s claim are questions of fact and factual inferences or questions of
mixed fact and law that contain no readily extricable questions of law. In
appellate review, this Court is not permitted to interfere with such findings
unless it is demonstrated that in making such findings, the trial judge made a
palpable and overriding error (see Housen v. Nikolaisen, 2002 SCC 33,
[2002] 2 S.C.R. 235).
[12]
In our
view, the appellant has demonstrated no such error on the part of the trial
judge. Based on the evidence that was before him, it was open to him to make
the findings referred to above. Recognizing the high level of deference that is
owed by an appellate court in relation to findings of a factual nature and of mixed
fact and law that contain no readily extricable question of law, we are not
prepared to interfere with any of the findings of the trial judge upon which he
based his decision to dismiss the appellant’s claim.
[13]
The
appellant argues that the trial judge erred in failing to consider her
allegation that the Minister acted in bad faith in relation to the collection
actions that were taken. This argument is without merit because there was no
allegation of bad faith on the part of the Minister in the appellant’s
statement of claim. As such, whether the Minister acted in bad faith was not an
issue that was before the trial judge.
[14]
In
addition, the appellant contends that the trial judge failed to consider
whether it was “fair, equitable and reasonable” for the Minister to have caused
the appellant to become subject to additional income taxes. This contention was
covered by the trial judge’s finding that the Minister’s actions did not cause
the additional income taxes that were assessed against the appellant. That
finding – one that we have declined to overturn – made it unnecessary for him
to consider whether the Minister’s actions were, or were not, “fair, equitable
and reasonable”.
[15]
In her
factum, the appellant requests this Court to reverse the assessments pursuant
to which she was rendered liable to tax on the income generated by the insurance
policies. This request cannot be granted as the validity of those very
assessments was upheld by this Court in the decision of Sharlow J.A. that is
referred to in paragraph 7 of these reasons.
Disposition
[16]
For the
foregoing reasons, and despite the appellant’s best efforts before us, we are
unpersuaded that we should interfere with the decision of the trial judge and,
accordingly, the appeal will be dismissed with costs.
"C. Michael Ryer"
Email this Content